Imagine sitting at your table and watching the news while drinking your morning coffee. The newscaster’s voice booms as he breaks the latest story: a fire burned through the night and destroyed almost half of the warehouses and businesses in a nearby industrial park.
The sobering realization of: “That is where my business is!” immediately comes to mind followed by “Please let my business be ok”. What if the worst HAS happened? Now what? The only way to continue operations is to have a comprehensive Business Continuity Plan (BCP) in place.
What Is Business Continuity Planning (BCP)?
BCP is the discipline of creating alternate plans to continue business operations in case a major disruption occurs. This practice creates recovery systems to deal with threats of all kinds. Do not let this simple definition be deceiving. A good BCP covers all aspects of operations from purchasing to production, payroll, shipping and receiving.
A business is at its most vulnerable when its operations are shut down. Orders still need to be fulfilled, employees need to get paid, products need to get shipped, and bills need to be taken care of regardless of what else is occurring. Customers often cannot wait for operations to resume and creditors demand payment. Good BCP provides explicit details about what happens in the case of an emergency and where alternate production will occur. The plan must outline how to procure and transport supplies in an effort to process orders. Companies must be able to move to an alternate site to resume operations immediately.
What Could Ever Happen?
- Natural disasters such as floods, earthquakes, sinkholes, tornadoes, volcanic eruption and tsunamis
- Fires caused by forest fires, arson, explosions and lightning
- Structural damage caused by a roof collapse or other physical plant malfunction
- Terrorism, war, sabotage, blackmail, hacking
Consider what could be lost during any of these tragic situations: inventory, data, money, and orders. All electronic, computerized and hard copy information should exist in another format at a different location. If not, the business could be in trouble. A good plan eliminates or mitigates risk through the use of redundant systems.
How to Create a BCP
1. The first step is to perform a Business Impact Assessment (BIA), which identifies the potential manmade and natural threats that could occur. A BIA also demonstrates the consequences if one of these threats occurs along with recovery strategies and preventative measures.
2. The second step is to identify resources and requirements specified by the BIA. Identify any gaps between requirements and current capabilities. Explore all the possible options to determine costs and feasibility.
3. The third step is to develop relocation plans and organize recovery teams. Also consider information technology recovery procedures. Consider how obstacles will be overcome. Compile the entire plan and make sure management is on board.
4. In the fourth phase, identify holes in the plan by actually testing the plan. Critical areas of coverage may be lacking and can become apparent during testing. A drill helps to identify these weaknesses. Train the business continuity team and make sure all staff members are oriented to the process. Update BCP to incorporate lessons learned from testing and exercises.
MMTC has experience helping manufacturers develop a BCP. For more information, contact us at 888.414.6682 or click here.
Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses successfully compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.